Opportunism has remained popular with asset managers, in particular those from defined benefit (DB) pension schemes, despite the severity of the current financial crisis, reports CREATE-Research, in association with Citi's Global Transaction Services and Principal Global Investors.

Research commissioned by Citi and Global shows that 60 per cent of asset managers expect DB clients to engage in opportunistic investment as part of a 'core and explore' investment strategy. 30 per cent of asset managers agreed for defined contribution (DC) clients.

"Simplicity, safety and quality are now the watchwords underpinning clients' investment goals," commented Professor Amin Rajan, CEO at CREATE-Research. "While funds consequently recognise the need to adopt a pragmatic approach to investment, managers are finding the dislocated debt markets attractive, where the savagery of the downturn is creating value opportunity."

The opportunism, however, will take place against a backdrop of changing priorities, the research showed, with DB-focused asset managers anticipating a favouring of mainstream asset clients, with an expected 60 per cent increasing allocation to global equities, and 53 per cent to investment grade bonds. Two-thirds of asset managers also expect DB clients to increasingly favour Liability Driven Investment (LDI) strategies. DC clients are also expected to favour mainstream asset classes in their quest for capital protection, with 61 per cent of survey participants predicting a weighting to equities and debt.

Jim McCaughan, CEO of Principal Global Investors, added: "Client behaviour will inevitably change in response to the economic downturn. While liquid asset classes will be preferred by all client sectors, we may start to see a renewed appetite among investors for opportunistic forays into debt and equity markets in a bid to boost returns."

225 asset managers across 30 countries took part in the survey, Future of Investment: The Next Move?

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